Condo and HOA Association Insurance in Connecticut: The Master Policy, D&O, and What CIOA Requires

Short answer: A Connecticut condominium or homeowners association needs a master property policy on the common elements (and, depending on the declaration, the units' structure), general liability, directors and officers liability for the board, crime or fidelity coverage for anyone handling association funds, workers' compensation if it has employees, and flood coverage where buildings sit in flood zones. The Connecticut Common Interest Ownership Act (CIOA), particularly C.G.S. 47-255, and the association's own declaration set the baseline. Pre-CIOA communities may be governed differently.

What CIOA shapes

CIOA requires associations to carry property and liability insurance and specifies policy terms, including that unit owners are insureds for liability arising from the common elements or membership, that the insurer waives subrogation against unit owners, that an owner's act does not void the association's coverage, and that the association's policy is primary where coverage overlaps. The declaration may require more. Boards should have counsel confirm which provisions apply to their community, since some CIOA insurance amendments do not automatically apply to condominiums created before CIOA.

The master policy

• Scope: "bare walls," "single entity" or "all-in" coverage, as defined by the declaration. Owners need to know which so their HO-6 policies fill the rest.
• Valuation: current replacement cost appraisals every few years; underinsurance leads to special assessments.
• Deductibles: large master deductibles, including percentage wind deductibles on the shoreline, are often passed to owners. See the master deductible and loss assessment.
• Ordinance or law and equipment breakdown for older buildings, elevators and central systems.

Liability and the board

• General liability and umbrella for common areas, pools, clubhouses and sidewalks. Connecticut towns often shift sidewalk snow duties to owners under C.G.S. 7-163a; see sidewalk liability.
• D&O for volunteer directors: disputes over assessments, architectural decisions, enforcement and discrimination claims. Confirm it includes property managers as insureds and covers non-monetary claims. See D&O for boards.
• Crime/fidelity at a limit reflecting reserves plus a few months of assessments, covering the management company's employees as well as board members.
• Cyber if the association or manager holds owner banking data.

Flood and coastal communities

Shoreline associations should consider an NFIP Residential Condominium Building Association Policy plus excess or private flood, since standard master policies exclude flood. See Connecticut flood insurance.

New England Insurance, an independent Connecticut agency in Bridgeport since 2012, reviews association programs for boards and managers. Contact us.

General information; boards should confirm statutory requirements with association counsel.